Wisconsin Criticized for Partial Medicaid Expansion

October 3, 2014

After waiver negotiations with the Centers for Medicare and Medicaid Services, the state of Wisconsin decided not to expand Medicaid to 138 percent of the federal poverty level (FPL) but to expand eligibility for childless adults up to 100 percent of the FPL, while sending others into the health care exchange.

Wisconsin had previously offered a very generous Medicaid program, but budget constraints forced the stop to halt enrollments. Under its new plan, however, there are no enrollment caps. As Linda Gorman, health expert, explains of the new plan, "The major differences for the people who are eligible for federally subsidized coverage is that they are immediately eligible for premium subsidies and are no longer subject to the waiting lists created by Wisconsin's BadgerCare Plus enrollment caps."

Devon Herrick, senior fellow at the National Center for Policy Analysis, writes that Governor Scott Walker has received criticism for the move, despite Walker's claim that, "Due to our reforms, 81,731 people living in poverty now have health care through Medicaid, and Wisconsin is the only state to not take the expansion with no health coverage gap."

Because Wisconsin did not expand Medicaid to 138 percent of the FPL as outlined in the Affordable Care Act, the state will continue to receive matching funds as it always has, at a rate of 59 percent.

While those opposed to Wisconsin's decision not to expand Medicaid to 138 percent of the FPL claim that the state is giving up $100 million in federal funding (because the federal government has said that it will cover 100 percent of the costs of expansion for the first three years in the states that expand their programs, and eventually 90 percent thereafter), Brett Healy of the MacIver Institute says that continued federal funding at such levels is far from certain, and states are facing a much greater financial risk than many realize. According to Healy, "With the Federal Government $17 trillion dollars in debt, it is absurd to assume the federal government can continue to pay for 90 percent of the cost to expand this program indefinitely." He continued: "While critics of Governor Walker's plan like to assert that taxpayers will save money by expanding a federal program, they conveniently ignore the fact that this plan is a net spending increase of $750 million dollars. Taxpayers are going to pay for this one way or another."